Jim Walker, chief economist of CLSA was the guest host on Asian Squawk Box. Right before he signed off he mentioned that CLSA’s gold analyst, Chris Wood, thinks gold will go to $3600 by the end of 2010. While Dr. Walker did spell out a bullish case for gold that was not that different from other bullish cases, there was not enough time to get into how Mr. Wood arrives at the target. It is possible that Wood is not the analysts last name. Dr. Walker has a Scottish accent that is so thick that I can’t be sure I heard the name correctly, but I did hear $3600...

I am scheduled to appear in my regular slot during the first half our of Asian Market Watch tonight. Here is a list of what I think is important this week. Treasury yields have moved back up a little over the last couple of weeks as expected. I believe the hurricane reaction is now of the bond market. Bonds are back to worrying about the Fed as a priority and to a lesser extent what 2006 will look like. There have been a few earnings warnings so far but we do not have a good feel yet for what the hurricanes will mean for stocks yet. I expect this to be more visible in the fourth quarter. I view the action in equities as favorable, short term. There is not a lot of selling pressure with what is known now. With the S+P 500 up 0.4% for the year I continue to believe that there will be a positive move as managers try to salvage the year. The energy market has not unwound from the hurricanes. As someone who has been bullish on oil for a couple of years, I am surprised that it is not closer to $60 right now. Given the amount of refineries shut down it makes sense to me that gasoline is still very high. The market seems to be pricing in a higher likelihood of 4.25% in Fed Funds. There is concern about the real estate market. I thought they should have stopped at 3.5%, I think a few months of $3.00 gasoline will make them wish they...

Today the lift may stick because there is less emotion than there was on Monday as the market was relieved about Rita. Perhaps this invalidates my idea from yesterday about the quarter closing out quietly. Maybe we can see a nice lift. Obviously I can’t know how many buy-siders need the market to rally, if you know what I mean. Oil is continuing to work higher, the curve is getting a little flatter, the dollar weaker against the commodity currencies and stronger against the others. I like the merger Gazprom is doing, although this one is foreign. M&A is a sign of confidence about the future. I am worried about 2006 domestically but it can still be a great year for foreign markets and I could be wrong about 2006 being bad in the...

Tim Middleton posted the 3Q results for his all ETF portfolio today. For the quarter his portfolio was up 4.9% vs 0.5% for the SPX (his quarter is off by a couple of days due to something about when articles publish but is it still a valid three month period). I wrote about his portfolio six months ago and noted that he had a 14.3% weight in energy, much bigger than the then 8.7% of the SPX. I said that with such a big bet on energy he would either beat by a lot or lag by a lot. Energy has been on fire and he has beat by a lot. The current article spells out what the portfolio will look like for the fourth quarter. The weight in energy is again high at what I count to be 14.1% vs now 10.19% for the S+P 500. I emailed him about this six months ago and I got a reply that I did not fully understand so I won’t try to email again. He is effectively 40% overweight the sector. It could easily turn out to be the right call but it is a big enough bet that it should be mentioned with some detail in the article and people that implement the portfolio for themselves should know that they have this much energy and that they will lag if crude drops to $45. I would note that energy’s weight has grown by about 150 basis points over that last six months. That is not meaningless. For what its worth I took some beta out of the sector in...

I meant to touch on this yesterday, early, but I forgot. I kind of thought the early rally would fizzle, but I don’t get credit for writing about it after the fact. The reason why I think the lift fizzled is that the S+P 500 was actually up last Thursday and Friday. For all of last week, SPX was only down 22 points, hardly a meltdown. I am surprised how much yields have gone up. In the face of Katrina, I said in a CNBC Asia interview that I thought the ten year yield would go from 4.00% to about 4.20%. The idea was just about retracement not something very clever or insightful. The ten year closed on Monday at 4.29%. I don’t think nine basis points matters a whole lot but I haven’t figured out whether this is more of a spike and the yield will go a little lower or if the ten year will zip right to 4.50%. 4.50% very soon would be a surprise but I suppose it is possible. It also ties into to my belief that the 30 year bond will generally result in higher rates. On a much different note, are there any other Yahoo Mail users that have been having problems lately? Just about every enhancement they’ve added in the last few years is now gone. I really would love to hear about this, even if you have had no problems. Thank...